Sun Pharmaceutical Industries (Sun Pharma) is making headlines as its stock price takes a significant leap, becoming the top performer in intra-day trading with a 3% increase. This impressive uptick follows the announcement of Sun Pharma’s acquisition of the U.S.-based biotech firm Checkpoint Therapeutics, which has investors buzzing with optimism.
Strong Market Reaction to Acquisition
The recent acquisition, valued at $355 million (approximately ₹3,099 crore), has garnered attention from analysts and investors alike. After the announcement, the brokerage firm Motilal Oswal reaffirmed its ‘Buy’ rating for Sun Pharma, projecting a target price of ₹1,970 per share—indicating a potential upside of 22% from current levels.
Details of the Checkpoint Therapeutics Acquisition
In a formal filing on March 10, Sun Pharma revealed its strategic move to acquire Checkpoint Therapeutics, a company listed on NASDAQ. This biotech firm specializes in developing innovative treatments for solid tumor cancers. Particularly noteworthy is Checkpoint’s FDA-approved drug, UNLOXCYT™ (cosibelimab-ipdl), aimed at adults suffering from metastatic cutaneous squamous cell carcinoma (cSCC) or those unable to undergo curative surgery or radiation.
- Acquisition Breakdown:
- Purchase price of $4.1 per share for all outstanding shares.
- Shareholders will also gain a contingent value right of $0.7 per share upon meeting certain regulatory milestones.
- Completion of the acquisition is anticipated by the second quarter of 2025.
Motilal Oswal’s Bullish Outlook on Sun Pharma
Motilal Oswal’s analysts view this acquisition as a pivotal moment for Sun Pharma, particularly in the lucrative oncology sector. By integrating Checkpoint Therapeutics into its portfolio, Sun Pharma is set to strengthen its position in the PD-L1 inhibitors market—an area that is witnessing substantial growth.
The brokerage highlights several compelling reasons for its favorable outlook:
- Market Expansion: With this acquisition, Sun Pharma establishes a foothold in the PD-L1 inhibitors market, which has robust demand.
- Effective Treatment: UNLOXCYT is recognized for its efficacy and lower side effects compared to existing cancer therapies, enhancing its competitive edge.
- Revenue Growth Potential: The drug’s opportunity for expanded indications via combination therapies positions it well for future revenue increases.
Motilal Oswal maintains its projections for FY25/FY26/FY27, anticipating strong growth ahead. The firm has assigned Sun Pharma a valuation of 30 times its projected 12-month forward earnings.
Current Stock Performance of Sun Pharma
During today’s trading session, Sun Pharma’s stock price rose by over 3%, reaching an intraday peak of ₹1,661.95. Presently, the shares are valued at approximately ₹1,662.60 each.
- Recent Stock Movements:
- The stock has increased nearly 6% over the past five days.
- Despite a slight decline of 2% over the last month, it has seen a 10% correction in the last six months.
- Yearly performance reflects a modest 4% gain.
- Year-to-date, the stock has experienced a decrease of about 12%.
The acquisition of Checkpoint Therapeutics represents a significant milestone for Sun Pharma, marking a strategic expansion into the oncology market that could yield substantial returns. Investors and analysts alike are keeping a close eye on how this development impacts Sun Pharma’s growth trajectory in the coming years.
